The Beauty of Simplicity

by J. Money -

one simple dollar

Morning, friends!!

I’m packing up for our yearly financial blogging conference this morning (FinCon – will you be there??), and every time I reach for my suitcase I’m reminded just how nice it is to be a minimalist :)

The old me used to spend hours trying to figure out what to bring and what not to bring (because you need to prepare for ALL the possibilities and feelings and weather of course!), but these days I literally just walk into my closet, pick up everything on my shelves/racks, and then literally just dump them all into the suitcase and I’m done.

BOOM!

Because the only clothes I have left are the ones I love and use every single day! And when you narrow it down to the essentials it magically takes up much less space – even allowing for all your hair accessories so you can still rock your fully quaffed ‘hawk ;)

But I tell you all this not to brag or steal from the fashion bloggers out there (okay, maybe I want to brag a little bit – but only because my wife is tired of hearing about it!!), but I share because this simplicity can improve the effectiveness of so many other areas in our lives too – particularly finances.

  • What do you think is easier to maintain: 8 checking accounts or 1?
  • How about credit cards? Would you rather keep track of 8 or 2?
  • 37 investment funds or 3 investment funds?
  • 4 brokerage accounts spread out everywhere or condensed into 1?

So many areas where the sheer number of accounts alone can cause you to give up!

I’ve talked about this before, but one of the biggest moves I’ve made in my finances over the years is simplifying them all down to as little accounts needed as possible. I can tell you where every last dollar of mine is snuggling, and in the off chance something happens to me one day my wife and other family members will easily be able to find it too.

  • I have one credit card for our family
  • One checking account for our family
  • One savings account for our family
  • One main place where all my retirement money is (Vanguard)
  • One main place where all our insurances are (USAA – which also houses all our banking accounts)
  • And then one main place where all my biz $$ is (Capital One – only because USAA still refuses to offer business accounts!! I raise my fist at you, sirs!!)

In other words, I basically have one main account for anything needed, which is typically housed under one main financial institution for even greater efficiency!

I don’t reap as many rewards and bonuses as others do (no fancy cash back or free miles to travel the world), but the peace of mind and ease of use is more than enough reward to keep me happy, and even more so – SANE.

The same mentality goes for general *life goals* too. I read somewhere once that the average person can truly only work towards one main goal at a time effectively, and anytime you start throwing on extras the odds of failing in *ALL* of them increase dramatically. Which still doesn’t stop any of us from trying because we’re wired to go for ALL THE THINGS!, but something still to be cautious of at least, especially if you’re not happy with the progress you’re currently making (or not making). Provided of course whatever I read back then was *right*, and you never do really know since I did read it off the internets ;)

Another known fact (this time from ME, so you know it’s accurate – hah!), is that it only takes ONE thing to become a millionaire over our lifetime too!

You can do more to speed it up and get there even faster, but if you literally just did one of these things year in and year out there’s no way for you NOT to amplify that wealth enough to hit the double comma club… Even if that club won’t be as exclusive as it is now with inflation and yada yada yada…

Those “things”?

  1. Maxing out your ROTH IRA every year ($6,000)
  2. Maxing out your 401(k)/TSP/403(b) every year ($19,000)
  3. Paying off your entire mortgage and saving all future payments ($100,000? $300,000? $500,000??)
  4. Saving 50% of your income over your lifetime (assuming you work most of your life)
  5. And then of course, winning the lottery… you’re surest bet ;)

Now some of these are a lot harder to hit than others of course, looking a you #4!, but the fact of the matter is any of these will snowball that wealth to glorious heights and it’s not that complicated in the least. It’s when you start getting crazy and trying to cut corners that often lands people in trouble!

And even if you can only hit these goals *some* of the years and not every one, it’ll still amplify your finances enough to keep you motivated! Especially when you see all that compounding at work! Because once that money’s *invested* it keeps compounding and compounding and then the compounded monies start compounding making even more compounded babies! It’s a compounding orgy!! (Am I allowed to say that now, Motley Fool??)

You ever hear of the magical penny? It’s like that, only with a little toned down rate of return ;) Here’s what a penny adds up to after doubling for only 31 days…

doubling penny millions

Isn’t that insane??? $10 MILLION DOLLARS after only 31 days of doubling?? I couldn’t believe it until I saw it, so I had to make my own spreadsheet (above) to really prove its accuracy.
And yup! It sure is accurate!

So all this to say that it doesn’t take a complicated plan to hit your financial goals. And in fact, the more you can simplify it the easier it just may become as you get rid of all the extra noise and can clearly see the picture before you! We’ll all hit our numbers on our own pace, but the path to get there has been relatively the same for thousands of years.

Spend less than you earn, save/invest the rest, let it compound and never touch it.

You stick to that and there’s no way you fail.

For further reading on some of these concepts:

If you’ll be at FinCon this week make sure to come find me!!!

And for everyone staying behind, we’ll still be serving up some juicy articles here, so it’ll be a party wherever you are ;) And I’ll even give you a sneak peek of what’s to come:

  • Tomorrow: how a friend became more frugal after having acne!
  • Friday: how my friend’s ex-fiancé spent all their rent money on weed (!!!)
  • Monday or Tuesday, depending on how much I party do “work” this week: the net worth report that may or may not go over a million dollars…

Fun days ahead – not gonna wanna miss them ;)

j. money signature

{ 14 comments… read them below or add one }

1 One Frugal Girl September 4, 2019 at 7:13 am

We are soul siblings. My husband and I also use one credit card company, bank, insurance company, etc. I always joke that I don’t need mint cause I can literally see all my money in one place. Hooray for simplicity!

Reply

2 J. Money September 4, 2019 at 7:42 am

HAH! Yet another perk! ;)

Reply

3 G September 4, 2019 at 8:19 am

I would love to combine more of my accounts to simplify (I paid off my mortgage 26 years early just so I could get rid of tracking that account), but with regulatory rules, my remaining accounts can’t be combined: taxable brokerage account, 401k, IRA, Roth IRA. I feel like I’m drowning in investment accounts. Between cash, credit card, and investment accounts, I’m tracking 8 accounts in Mint. I’d love to get down to 4 (credit card, checking, emergency fund, investment), but that’s not going to happen.

Reply

4 J. Money September 4, 2019 at 10:31 am

Are all the accounts under the same roof at least?? That definitely helps streamline things more (for example – all mine are with Vanguard). Though you can’t do much about the 401k if it’s still at your current employer (even more reason to pull the plug sooner!! Haha…)

Reply

5 Elizabeth September 4, 2019 at 8:47 am

I prefer having a ton of accounts. They keep me accountable. I can only use my house fund for home repairs, car account for car insurance, truck account for buying a newish truck, kids accounts for their college, and on and on. Without all the accounts I’d feel insecure about how much I have. I guess I could keep track in a spreadsheet but it would be very easy to over spend.

Reply

6 J. Money September 4, 2019 at 10:32 am

If it works for you – keep going!! No shame in that!

You’ll prob like this post we did once on the site ;)

https://www.budgetsaresexy.com/6-reasons-having-one-savings-account-can-be-bad/

Reply

7 Elizabeth September 4, 2019 at 8:51 am

I’m going to add my sister has 1 savings account. She refuses to use it she just hoards the money. I told her to create a house account for home repairs which her house desperately needs ( front door is literally dry rotted) and she could save in that account and won’t feel like she can’t use the money because it’s little earmarked for home repairs. She’s yet to take my advice and her doors worse then ever.

Reply

8 J. Money September 4, 2019 at 10:33 am

At least the money is piling up!! Could be worse and she can’t even afford to fix it, eh?

Reply

9 Kate September 4, 2019 at 9:04 am

1 day-to-day account
1 medium turn savings account
1 long term investment account
1 home
1 investment property
1 pension fund
1 purse
1 secret cash hiding spot
1 finance app (YNAB!)
1 blog subscription (Hi J Money!)
1 frequent flier airline club
and, annoyingly, 2 credit cards because not EVERYONE takes AMEX!

Reply

10 J. Money September 4, 2019 at 10:33 am

you had me at 1 purse.

impressive!!

Reply

11 Chris September 5, 2019 at 8:25 am

Can you link to the bank where I can invest my magic penny? Wouldn’t that be nice? LOL

Reply

12 J. Money September 12, 2019 at 6:58 am

Sure, as soon as I locate a heard of unicorns!

Reply

13 KL September 7, 2019 at 7:31 am

3 banks
1 investment bank
11 accounts
Individual stocks + couple index funds
2 cards
…that just mine+joint accounts.

When we started on the path to more sensible use of money, the best method I found was hide some of the money in another bank. If you did not see it, you didn’t spend it. Still doing the same.

One bank for daily use, second for emergencies and other savings (no cards), third for targeted saving like investments. Third bank has better interest rate and lower accessibility, that’s holding cash for our next investment apartment.

All traced in excel once a month. After getting used to doing it feels like me-time now. I could add them, Mint-like, to the primary bank’s app (thanks new Euro regulation!) but I don’t want to see that money on a daily basis.

I know some people who don’t even need separate savings, their money keeps piling on checking. Gotta do what works for you. :)

Reply

14 J. Money September 12, 2019 at 6:59 am

Totally :)

You find something that works and you keep riding it!!

Reply

Leave a Comment

Previous post:

Next post: